A little-known but important U.S. financial rule facing ax

Minutes before the inauguration of President Trump, I retired.

I can attest that transitioning from work to retirement can be hard. Giving up a regular income and being faced with only outflow can be a startling change. Dipping into your savings every month makes you painfully aware of the importance of your savings.

Recent actions by President Trump suggests he wants to take actions that I believe will erode retirement security.

After a long career managing the pension and 401(k) retirement plans of several Fortune 500 companies, I came to work at the Department of Labor in the Employee Benefits Security Administration. I joined the team working on the Fiduciary Rule, which requires financial professionals to provide retirement investment advice that is in their retirement investors' best interest — a rule the Trump administration wants to delay or revoke.

There are a few basic principles that I brought to government from my work in the private sector. First, employees value and benefit from employment-based retirement plans.

Second, employees rely on their employers to offer a cost-effective plan with a sufficient number of high-quality investment options to guide them to a secure retirement.

Third, despite millions of dollars spent on financial education, employees struggle to make the sophisticated choices necessary to provide for their own retirement security without advice from experts.

I understand the complexity of business relationships and the challenges in identifying conflicts of interest, and I advocated for appropriate protections. Yet, under the previous regulations, my vendors and advisers to IRA owners were not required to stand in the same shoes.

The government team I joined had been studying the fiduciary issues for years. Their research confirmed my experience. Most of the assets in today's IRAs are the result of rollovers from company-sponsored retirement plans. All too often the rollover is to the company's retirement plan vendor.

Unfortunately, these rollovers often result in the consumer paying more for the same investment option, which erodes retirement savings. While IRA advisers may offer consumers more "choice" of investment options, my experience is that too much "choice" can result in inaction, not better actions. This increased "choice menu" also increases the investors' reliance on their adviser.

Our employees benefited from a relationship of trust with our employer. Many employees assumed that the corporation's vendors were also in a similar position of trust, placing the investor's interest above their own. However, this only becomes a reality under the Fiduciary Rule.

As a chief investment officer I devoted considerable time and effort to understanding the capabilities and roles of the people and firms we engaged. However, most consumers are no match for the sophistication of the advisers they hire. The Consumer Finance Protection Bureau has reported that financial advisers use more than 50 different designations implying sophistication and trust. But most of those titles have no credentials behind them and do not require the adviser to act in the client's best interest. If and when advisers disclose their conflicts of interest, most consumers don't understand the financial implications and motivations that result.

The work on the Fiduciary Rule has taken years. I personally participated in more than 100 meetings with stakeholders across the spectrum, participated in days of public hearings and read thousands of public comments. Some of the input was constructive and some was self-serving, but all comments were carefully considered. That inclusive process resulted in a Fiduciary Rule that is both reasonable and workable.

But, yes, it will require firms to change — some firms more than others. That change will require advisers to put their customer's interest first. That shouldn't be so hard.

Now President Trump wants more study of the rule. We don't need more study. We need action. The only thing new in this space is the president. He should focus on acting in the best interests of the American consumer.